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By Kate Abnett<\/p>\n
BRUSSELS, June 22 (Reuters) – Eastern and central European countries including Poland, Bulgaria, Romania and Estonia have demanded the European Union strengthen a fund that helps \u200cpoorer EU nations transition to clean energy, a letter seen by Reuters showed, as \u200cBrussels prepares to overhaul the bloc’s biggest climate change policy.<\/p>\n
The European Commission is preparing a revision of the EU \u200bemissions trading system (ETS), and is fielding competing demands from governments and industries over how to amend the huge scheme. The Commission proposal is due on July 15.<\/p>\n
In a letter to the European Commission dated June 19, the 12 governments urged the EU to strengthen the “modernisation fund” – a pot of revenues \u200cfrom carbon market permit sales, which \u2060has invested more than 20 billion euros ($22.85 billion) since 2021 to help the EU’s poorest member states wean themselves off fossil fuels.<\/p>\n
“In the current political \u2060and economic context, characterised by increased geopolitical risks and uncertainty, predictable financing mechanisms remain an essential condition for the success of the energy transition in the EU,” said the letter.<\/p>\n
“We call for a significant \u200bincrease in \u200bthe scale of financing, aligned with the growing \u200bchallenges of the transition.”<\/p>\n
The letter was also \u200csigned by Greece, the Czech Republic, Croatia, Hungary, Latvia, Lithuania, Slovakia and Slovenia.<\/p>\n
The EU’s review of its ETS was planned to revamp the carbon market for the long term, beyond 2030, to align it with the EU’s overall 2040 climate goal to cut emissions by 90%.<\/p>\n
But the plan has become embroiled in political debate about how to urgently reverse Europe’s declining industrial competitiveness. Governments \u200cincluding Italy and the Czech Republic have urged Brussels \u200bto weaken the ETS to reduce short-term costs for \u200blocal industries – but which could also mean \u200bthe scheme generates less funding that can be channelled into the transition \u200cto clean energy.<\/p>\n
The modernisation fund supports the \u200b12 countries behind the letter, \u200bplus Portugal, aiming to ensure the EU’s poorer members can keep up with the bloc’s targets to reduce emissions.<\/p>\n
In recent years, the scheme has backed investments including energy-saving renovations \u200bof public thermal baths in \u200cHungary, and Poland’s \u201cClean Air\u201d financing programme which helps families replace polluting heating systems and \u200binsulate their homes.<\/p>\n
The letter was reported by Bloomberg News earlier on Monday.<\/p>\n
($1 = 0.8751 \u200beuros)<\/p>\n
(Reporting by Kate Abnett; Editing by Susan Fenton)<\/p>\n<\/div>\n